Airlines Up on Lower Oil, Financials Next?

With the price of oil down significantly – at latest check, crude oil futures closed lower by $5 to $131.83, airline stocks on average rose between 10% to 20% during Thursday’s session, pretty astonishing on a percentage basis with a lot of those gains being magnified because of some intense short covering.

So besides airlines going gangbusters, what’s the next sector to see a reprieve from a vicious downward cycle? Yes, it’s totally unrelated, but it could be financials. With the Dow coming off a third intra-day test of 12,000, the volatile market finally got a clear directional signal shortly after 2 p.m. with a significant swing into positive territory which included a whole load of financial stocks – Banc of America (BAC), Wachovia (WB) and Wells Fargo (WFC) to name just a few, that closed particularly strong, even in light of Citi’s CFO’s warning of more write downs. Rallying on good news, that’s something new and often signals a bottom. This could make for an interesting quadruple witching Friday.

Comments

[jdlech]

I think you're fantasizing. The steady drumbeat of bad financials news continues on with regionals like Fifth Third now diving to new lows. But we'll see how the market feels today.

[Ernie Montague]

Gee, friday oil closed at $135. These pronouncements about the decline in oil prices seem a bit premature. When it goes down $20 a barrel in two weeks, then there may be some substance. When oil is still flirting with all time highs, they are just stupid.

[Ronmac]

I wouldn't buy the financials at this point. No still knows exactly what they have on the books. I am suspicious they are using accounting methods that would have made Enron blush.

[paulk8756]

No, the price of oil isn't going to retreat anytime soon unless we get meaningful "government intervention." Of course, in the U.S. that means the government ending it self-imposed boycott on domestic oil and gas exploration.

Failing this, our government is really going to have its hands full. It's going to have to NATIONALIZE the airline, auto, trucking and banking businesses, not to mention the rest of our failing economy, just to "SAVE US."

And that's EXACTLY what the Democrats in Congress and our new President have wanted all along, much like their plans to provide us with "free" national health insurance.

Wow! Now, wouldn't that be some REAL CHANGE we could believe in!

[squashnut]

Rallying on good news? What good news for financials? Keep up with voodoo. Palm readers sometimes predict the future very accurately.

[squashnut]

Who writes this load?

[altutone]

financials didn't close strong is this some type of joke! that is why
were able to see bac,wfc,c and some others lower than their YL.

They may be bottomed out or near to bottoms but at good trading range for traders. Oil hikes got to be stopped otherwise we are in big big trouble!

[SWRichmond]

I am sorry to be blunt, but do you bank shills get paid to write and post junk like this?

"Oil's down, airlines are up, and how about them financials!"

I came to this sector to read information and opinions about oil and instead I find yet another boob pumping bank stocks.

[RonB]

Wells Fargo is an extremely attractive opportunity at this price. It has been acquiring other banks in all thjis turmoil, which is hardly the activity of a bank that needs to raise capital. It is also Warren Buffett's second largest holding, and he has been adding to it. I have been adding as well. The herd is throwing out the good with the bad, which always provides bargains.